The Rogers-Shaw merger still remains subject of the approval by the Minister of Innovation, Science and Industry
Canada’s Federal Court of Appeal has rejected the competition bureau’s request to block the merger of Canadian carriers Rogers and Shaw, a decision that has removed one of the final hurdles for the completion of the $20-billion merger.
Competition Commissioner Matthew Boswell issued a statement expressing disappointment with the decision by the court.
“Although today’s developments are discouraging, we stand by the findings of our investigation and the decision to challenge the merger. We brought a strong, responsible case to the Tribunal after conducting a thorough examination of the facts,” Boswell said.
“That being said,” he wrote, “we accept the decision of the Federal Court of Appeal and we will not be pursuing a further appeal in this matter.”
Canada’s competition bureau initially put on hold Rogers’ proposed purchase of Shaw, as it believed the deal would negatively impact competition in the domestic telecom sector.
At the start of the month, the Competition Tribunal dismissed the appeal to block the deal, stating that the merger would not represent the loss of competition the Commissioner claimed. The competition bureau immediately said it would appeal this decision at the Federal Court of Appeal in Ottawa. Now, this new appeal has been rejected by the court, which said that the appeal was “without merit”.
“We welcome this clear, unequivocal, and unanimous decision by the Federal Court of Appeal. We continue to work with Innovation, Science and Economic Development Canada to secure the final approval needed to close the pro-competitive transactions and create a stronger fourth wireless carrier in Canada and a more formidable wireline competitor,” the telcos said in a joint statement.
The proposed merger was initially announced on March 15, 2021.
In August 2022, Rogers Communications, Shaw Communications and Quebecor entered into a definitive agreement for the sale of Freedom Mobile to Videotron, a subsidiary of Quebecor. The involved parties also said that the sale of Freedom Mobile would pave the way for the establishment of a “strong fourth national wireless services provider”, something that would address the concerns initially raised by the Commissioner of Competition and the Minister of Innovation, Science and Industry regarding the Rogers-Shaw merger.
The new combined business of Videotron and Freedom Mobile will be in a position to launch a national 5G offering, using Videotron’s 3.5 GHz frequencies.
The Rogers-Shaw transaction has already been approved by the shareholders of Shaw and the Court of Queen’s Bench of Alberta, and the Canadian Radio-television and Telecommunications Commission, but remained subject to review by the Competition Tribunal and Competition Bureau and approval by the Minister of Innovation, Science and Industry.
François-Philippe Champagne, Minister of Innovation, Science and Industry, must approve spectrum license transfers from Shaw to Videotron – in connection with the proposed acquisition of Freedom Mobile by Videotron – before the combination of Rogers and Shaw can proceed.
The federal government’s decision whether or not to approve the merger will focus on making sure the process will provide more competition and affordability for Canadians, Champagne has said.
